Dow tumbled 521, decliners over advancers a noticeable 5-1 & NAZ sank 306. The MLP index was off 1+ to 212 & the REIT index fell 3+ to the 367s. Junk bond funds declined along with the stock market & Treasuries saw a little buying, lowering yields. Oil was steady at 78 after it's recent rise & gold retreated 20 to 1805.
AMJ (Alerian MLP index tracking fund)
The US economy
grew at a faster pace in Q3 than previously reported as
American consumers continued to spend even in the face of painfully high
inflation & rising interest rates. GDP, the
broadest measure of goods & services produced across the economy,
grew by 3.2% on an annualized basis in the 3-month period from Jul-Sep, the Commerce Dept said in its 3rd & final
reading of the data. That compares with the previously reported
2.9% increase. The change stemmed from a significant upward
revision to personal consumption, which rose 2.3% in the final report
compared to the earlier 1.7% reading. Services spending was also
stronger in Q3 than initially reported. Those
figures underscore that consumer spending remains solid, despite
scorching-hot inflation & higher interest rates. Hiring has also
remained strong despite growing economic headwinds. However, there is a growing expectation that consumer resiliency will fade in 2023 & that the US economy will tumble into a recession. That's because the Federal
Reserve is embarking on one of the fastest monetary tightening paths in decades
as it seeks to wrestle consumer prices that are still running near a
40-year high back to 2%. In a troubling development, the Fed's
rate hikes have thus far failed to tame inflation, which remains
stubbornly high: The gov reported earlier this month that the
consumer price index soared 7.1% in Nov from the previous year,
about 3 times the pre-pandemic average. That indicates the Fed
will have to continue charting its aggressive course, raising the odds
that it will crush consumer demand and cause unemployment to rise. Policymakers have already approved 7 straight rate hikes – including 4 75-basis-point increases – 8 have indicated they plan to
continue raising rates in 2023. Hiking interest rates tends to create higher rates on consumer & business loans, which slows the economy by forcing employers to cut back on spending. Still, Fed Chair Jerome Powell
pushed back against that expectation during his post-meeting press
conference last week, suggesting that lower inflation prints could boost
the odds of a soft landing – the sweet spot between curbing inflation
without flatlining growth. "To the extent we need to keep rates higher and keep them there for
longer and inflation moves up higher and higher, I think that narrows
the runway," Powell told reporters. "But lower inflation readings, if
they persist, in time could certainly make it more possible. I don't
think anyone knows whether we're going to have a recession or not, and
if we do, whether it's going to be a deep one or not. It's not
knowable."
US economic growth revised up to 3.2% despite soaring rates, inflation
The 10-year Treasury yield fell as investors remained concerned that further interest rate hikes could tip the economy into a recession. The yield on the benchmark 10-year Treasury note was last down roughly 2 basis points at 3.662% while the yield on the 30-year Treasury bond slipped about 2 basis points to 3.728%. The yield on the 2-year note rose more than 3 basis points at 4.25%. Yields move inversely to prices. Global bonds sold off earlier in the week, driving yields higher, after the Bank of Japan unexpectedly tweaked its yield curve controls, in a move aimed at cushioning the effects of protracted monetary stimulus measures. However, economists largely interpreted the move as a necessary tweak rather than the prelude to a hawkish pivot from the persistently accommodative central bank. Positive sentiment returned to risk assets yesterday after a strong round of corp earnings & the release of consumer confidence data for Dec, which came in at the highest level since Apr.
10-year Treasury yield falls Thursday as U.S. recession fears linger
Hundreds of employees at Tyson Foods (TYS) have decided not to relocate to the
company's headquarters in Arkansas next year as the company
consolidates its corp offices. The workers are reportedly from 2 of its largest business units. Tyson (TYS) announced in Oct that it planned to close its offices in Chicago, Downers Grove, Ill. & Dakota Dunes, SD. Those
corp employees work in the prepared foods, beef & pork
divisions. About 1000 employees total work in those locations, the
company has said. About ¾ of the 500 employees in the South Dakota office told the company they wouldn't make the move. More than 90% of the employees in its Chicago office have declined to relocate. Nationwide, the meat company has about 120K employees, with about 114K of them working in production plants. "I’m confident the plan we have in place ensures business continuity and
positions us for long-term success," said CEO Donnie
King. "We knew there would be a variety of responses when
we announced the consolidation of our corporate locations." The stock fell 68¢.
If you would like to learn more about NKE, click on this link:
club.ino.com/trend/analysis/stock/NKE_aid=CD3289&a_bid=6ae5b6f7
Hundreds of workers leaving Tyson as company closes offices: report
It looks like the bulls started their holiday weekend early. The revision for Q3 GDP didn't help today.
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